OfficailBLOG
  1. BigBoss
  2. blog
  3. USD rises on the climbing yields, despite disappointing job reports; China’s CPI turned positive, showing that the economy is well on track

USD rises on the climbing yields, despite disappointing job reports; China’s CPI turned positive, showing that the economy is well on track

BLOG January 11, 2021 at 06:37 am (GMT)

• December job market in the US saw a loss of 140,000 jobs, based on the reports from non-farm payrolls
• Gold prices face volatile movements and consecutive declines due to the rising risk appetite
• China’s consumer price index (CPI) recovered in December after turning negative in the previous month for the first time in 11 years

Last Friday in the US the market witnessed collapse of the job market, as the country lost 140,000 jobs in December, down from a gain of 245,000 in November. The unemployment rate stayed at 6.7%, close to twice as high as it was in February before the COVID hit. Biggest losses came from the food and drinking places, where 372,000 jobs were lost, offsetting gains in other sectors. However, on Monday morning’s trading session in Asia, Dollar was up, primarily boosted by the rising yields on the long-term treasury bills. Biden has promised “trillions” into the market, effectively pushing up the 10-year yields as more investors gaining confidence in the US’s long-term economic recovery. The 20 bps increase on the yields to 1.1187% has helped USD to a one-month high of 104.095 yen earlier in the day. Before the spending weakens the USD when the actual stimulus package arrives, market in the short-run has recognized the confidence first.

Due to investors’ confidence and the rising risk appetite given Biden’s promises, gold has witnessed some consecutive losses, currently landing at around $1,829 per ounce. Earlier during the trading session, it hit over one-month low of $1,817. Analysts perceive this volatile movement as a result of the upcoming peaceful transition on the US presidency. Moreover, the rising US treasury yields also contributed to some losses on this safe-haven metal.

In China, December CPI released at +0.2% from the -0.5% in November, which was also the first time it entered the negative territory in 11 years. The improvement was supported by rising food prices, which posted a rise of 1.2% compared with -2.0% decline in prior month. Furthermore, China’s producer price index (PPI), measuring the prices that factories charge wholesalers, increased to -0.4% from -1.5%. These figures show positive direction on China’s economic recovery and continuing strength on CNY. Currently the reference rate of USDCNY is at 6.4764.